Wednesday 29 May 2013

ENTREPRENEURSHIP IN A FOREIGN LAND : South Africa - a Ghanaian perspective

South Africa is the biggest economy in Africa which boasts of its prosperous financial sector and expansive consumer market.

This prosperity has subsequently attracted a lot of human capital from foreign countries in Africa to this country. The economic climate is highly competitve - the job market in particular with unemployment being last reported at an excess of 25% of the labour force.

We are indeed perplexed by the fact that despite this tight competition in the labour market our brothers and sisters from other countries still prosper(relatively speaking) when they arrive in this land, taking hold of opportunities we locals take so forgranted.

I will give an account of the perceptions shared by one of the prosperous business men, in his 40s, who came to South Africa with the sole purpose of raising capital in order to establish a booming enterprise back in Ghana.

                                    Photo taken by Thato Molefe at Vereeniging , 14 April 2013

Within a matter of weeks this gentleman has become an established entrepreneur within the Vereeniging community, having established a boutique and fashion house selling african shweshwe fashion wear and wedding dresses. The location of his business is bingy and unassuming, but the rate of success he has attained thus far easily outshines that of a typical business in the central business district.

When you enter his working quarters you feel the warmth of the environment he's created. With his employees always cheerful and in high spirits - sowing beautiful garments which have haboured the favour and admiration of locals. Never compromising, he still keeps to his African style of fashion design.

He gives account of how back in Ghana he had branches of stores where he would distribute and merchandise shoes he would import from China. He tells me of how he would ship even three containers at a time and how easy life was for him in those days. He gives account of how his prosperity came to an abrupt end when members of his extended family refused to continue in using the main family house as collateral for his liabilities with the bank so it was then and there where he had to liquidate all his company's assets in order to pay off the debt he owed to the bank and maintain peace with the family.

He alludes to his amazement regarding how the economic dynamics in Ghana differ in relation to those in South Africa. According to Mr. Eddie - Ghanaians are entrepreneurial people and big business in Ghana is owned by black Ghanaian dynasties instead of white owned conglomerates - according to him - no multinational company may enter the country to be completely owned by foreign investors. He claims that Ghanaians have a total hold on the rudder of economic affairs in Ghana to the extent where you'll never see a Ghanaian working for a foreign national - instead the contrary is true where you'll find even North Africans, say from Somalia, come into Ghana and work for Ghanaians. They have taken ownership of the entrepreneurship in their country.

Ghana vs South africa
Growth entrepreneurship is the order of the day in Ghana - He gives account on how Ghanaian entrepreneurs would employ people with the mind of grooming them to occupy greater managing positions in their entreprises and that employees never expect to occupy one position forever.

He criticises South Africans for their culture of consumption. He says that he is baffled by how South Africans would resort to going to banks for car finance instead of business finance. He says that it is typical for South Africans to go to school and dream to work for big established companies whilst in Ghana it is the norm for people to dream to start a company of their own(though informal) and make it prosper.

He says that the only inhibiting factor to the prosperity of businessmen in Ghana is the weakness of the Ghanaian financial sector and the difficulty of acquiring business loans. He says that this is the sole reason why Ghanaians move out of the country - to lands where they can hopefully earn enough money in order to raise capital for businesses which they intend to establish when they arrive in Ghana. He also acknowledges that the market in Ghana is rather saturated and that the nature of business is such that they are constantly compeiting to stand out in one way or the other.

I then put forth the question of whether there is social security in Ghana and he gave me a very expressive "NO!" We then tacitly concluded that this could be one of the inhibitors of entrepreneurship in South Africa among South Africans.

I also posed the question of their standard of education and he interjected "it is very high!" - which may be arguable but justifiable in terms of Ghana's literacy level in comparison to South Africa's in 2009.

I also asked if he knew any millionairres in person and jokingly if they are ritualists, he laughed and replied with a gesture of great pride in his face he replied yes, He tells about a friend of his who gained acclaim in his land for his monopoly of freight service in the region and how his friend was rather humble and approachable for a millionaire.

He says that his personal journey was never simple and I can personally attest to that - Since arriving in the country he's been toiling and labouring under intense social conditions where he would receive great antagonism from those he competed with in business - starting small as a vendor selling bags and hair extensions outside a mall in his stall amongst other such "local" vendors.

He then found an opportunity to break away from that environment and found an affordable rental space - managed to acquire sowing machines and employ labour. This space was dead but he converted it to such a lively environment.

When I spoke to him I couldn't help but notice how optimistic he was about the prospects of his business in this country even though he was facing trouble with home affairs because of a corrupt home-affairs official who was asking for bribes in order to process his papers. He says that if only he would get his papers it would take less than six months for him to become a resounding success.

He has great plans of building an empire where he even plans to start an academy and teach students soft skills in fashion such as sowing so that those who graduate from his academy may also be assimilated into the business - He accounts that this is the business model in his homeland Ghana - a country which he proclaims to be among the first to attain independance in Africa and has good grasp of the dynamics of the economy.

Ghana might be a country with abundant human capital with regards to the entrepreneurial spirit. But it seems to be plagued with immense political instability which leads the inhabitants of the Ghanaian land to leaving the country for greener pasture where economic pursuits are unhindered by political stagnation.

This leaves us with a question why then does the majority of South Africans never get insync with economic activities as their foreign counterparts do? this by just mere observation. Is this entitlement mentality of South Africans hindering our growth especially among black South Africans. We have labour unions in South Africa always striking for higher wages which are uncompetitive and don't reflect the change in human capital and productivity of the labour force instead these continuous wage hikes hamper job creation

We need to change our consumption culture in South Africa and adopt an investment culture - this by making business financing easier to obtain and motor and home financing less accessible, such changes will in my opinion make a huge difference. An environment where taking progressive risks is a norm is conducive to the development of this country. The political agenda has always emerged above the economic agenda in South Africa whilst that demographic of the population which has always been economically empowered continues with their economic agenda.

Corruption in South Africa has been veiled by the buzz word - "BEE" - where we observe sons of the state's president gain lucrative government contracts/tenders and friends of state heads gain tenders from the public sector. It is truely an animal farm where indeed :"we are all equal but some are more equal than others." How we ought to effectively fight corruption is still to be discovered.

One thing that South Africa can be commended for is its investment in education - from the ground - I can personally testify of the convenience of the student financial scheme through which I have since been able to complete my tertiary education. The question now lies in how exactly will the quality of education be improved especially in rural South Africa and how is a culture of entrepreneurship and personal initiative going to be groomed in a landscape where job-seeking and over-dependency on the government is prevalent.

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